BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2492


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          Date of Hearing:  May 4, 2016


                       ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT


                           Susan Talamantes Eggman, Chair


          AB 2492  
          (Alejo) - As Amended April 14, 2016


          SUBJECT:  Community revitalization.


          SUMMARY:  Makes a number of changes to the Community  
          Revitalization and Investment Authority program.  Specifically,  
          this bill:  


          1)Makes a number of changes to the Community Revitalization and  
            Investment Authority (CRIA) program, including the following:


             a)   Allows a CRIA to use a combination of both the United  
               States (US) Census Bureau census track and census block  
               groups data to identify a project area.


             b)   Allows a CRIA to use, at their discretion, statewide,  
               countywide, or citywide levels of area median income to  
               identify a project area.


             c)   Clarifies the source of unemployment data required to  
               identify a CRIA project area and allows a CRIA to use the  
               unemployment data from the periodic American Community  
               Survey published by the US Census Bureau in addition to the  








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               labor market information published by the Employment  
               Development Department (EDD) in March of the year the CRIA  
               plan is prepared.


             d)   Provides that in determining the crime rate of a  
               proposed CRIA project area, that the crime rate is based on  
               the area's average crime rate for violent or property  
               crimes offenses as documented by the records maintained by  
               the law enforcement agency in the jurisdiction, and  
               requires the crime rate to be calculated by taking the  
               local incidents of violent and property crimes or any  
               offences within those categories for the most recent  
               calendar year for which the Department of Justice maintains  
               data and dividing it by the total population of the  
               proposed plan area and multiplying that amount  by 100,000.  
                Provides that if the local crime rate for the proposed  
               plan area exceeds the statewide average rate for either  
               violent or property crime, or any offense within these  
               categories by more than 5%, then the crime rate necessary  
               to qualify as a CRIA project area is considered met. 


             e)   Gives a CRIA the same authority as an Enhanced  
               Infrastructure Financing District (EIFD), to receive funds  
               allocated to it, pursuant to a resolution adopted by a  
               city, county, or special district from: 


               i)     The increased property tax revenues that the city,  
                 county, or special district receives from the dissolution  
                 of redevelopment agencies; 


               ii)    Property taxes received by a city or county in lieu  
                 of former vehicle license fee funds; or, 


               iii)   Funds derived from various assessments that may be  








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                 imposed by special districts.



          2)Makes other technical changes. 


          EXISTING LAW:  


          1)Dissolves redevelopment agencies as of February 1, 2012.

          2)Allows local governments to form a CRIA in two ways:

             a)   A city, county, or city and county can adopt a  
               resolution creating an authority governed by a five-member  
               board that is appointed by the city, county, or city and  
               county's legislative body.  Three-board members must be  
               members of the city, county, or city and county's  
               legislative body and two must be public members who live or  
               work within the community revitalization and investment  
               area; or, 

             b)   A city, county, city and county, and special district,  
               in any combination, may create an authority by entering  
               into a joint powers agreement.  The authority's governing  
               body must be comprised of a majority of members from the  
               legislative bodies of the public agencies that created the  
               authority.  The governing body must include at least two  
               public members who are appointed by a majority of the  
               authority's board and must live or work within the  
               community revitalization and investment area. 

          3)Prohibits school entities and redevelopment successor agencies  
            from participating in a CRIA.  Prohibits a city or county that  
            created a former redevelopment agency from forming an  
            authority, unless the former agency's successor agency has  
            received a finding of completion from the Department of  
            Finance (DOF), and complies with other specified conditions.








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          4)Allows a CRIA to carry out a community revitalization and  
            investment plan (plan) within a community revitalization and  
            investment area.  Requires that at least 80% of the land  
            calculated by census tracts or census block groups within the  
            area must be characterized by both of the following  
            conditions:

             a)   An annual median household income that is less than 80%  
               of the statewide annual median income; and,

             b)   Three of the following four conditions:

               i)     Nonseasonal unemployment that is at least 3% higher  
                 than the statewide median, as defined by a specified  
                 labor market report;

               ii)    Crime rates that are 5% higher than the statewide  
                 median crime rate, as defined by a specified Department  
                 of Justice report;

               iii)   Deteriorated or inadequate infrastructure, such as  
                 streets, sidewalks, water supply, sewer treatment or  
                 processing, and parks; or,

               iv)    Deteriorated commercial or residential structures.


          5)Allows a CRIA to carry out a plan within a community  
            revitalization and investment area established within a former  
            military base that is principally characterized by  
            deteriorated or inadequate infrastructure and structures.  

          6)Allows the legislative body or bodies of the local government  
            or governments that created the CRIA to appropriate any amount  
            the legislative body or bodies deem necessary for the  
            administrative expenses and overhead of the CRIA.  The money  
            appropriated may be paid to the CRIA as a grant to defray the  
            expenses and overhead, or as a loan to be repaid upon the  








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            terms and conditions that the legislative body may provide.   
            If appropriated as a loan, the property owners and residents  
            within the plan area must be made third-party beneficiaries of  
            the repayment of the loan.  

          7)Enumerates a CRIA's powers and allows a CRIA to dedicate  
            funding to specified infrastructure, low- and moderate-income  
            housing, brownfield cleanup, seismic retrofits, property  
            acquisition, construction of specified structures for  
            provision of air rights, and direct assistance to businesses  
            for industrial and manufacturing uses.

          8)Deems a CRIA to be a local public agency subject to the Ralph  
            M. Brown Act, the Public Records Act, and the Political Reform  
            Act.

          9)Requires a CRIA to adopt a plan that may include a provision  
            for the receipt of tax increment funds generated within the  
            area, provided the plan includes eight specified elements.

          10)Specifies the manner in which a CRIA must consider adoption  
            of the plan, including requiring a public hearing, a protest  
            process and, in some cases, voter approval of the plan through  
            a specified election process. 

          11)Directs a CRIA to consider and adopt a plan amendment in  
            accordance with the procedures that applied to the  
            consideration and adoption of the original plan.

          12)Allows any city, county, or special district that receives ad  
            valorem property taxes from property located within an area to  
            adopt a resolution directing the county auditor-controller to  
            allocate some or all of its share of tax increment funds  
            within the area covered by the plan to the CRIA.  A resolution  
            may be repealed by giving the county auditor-controller 60  
            days' notice.  However, the county auditor-controller must  
            continue to allocate the taxing entity's taxes that have been  
            pledged to repay debt issued by the authority until the debt  
            has been fully repaid.








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          13)Requires a CRIA to annually review the plan, prepare an  
            independent financial audit, and adopt an annual report in a  
            public hearing.

          14)Provides that if a CRIA fails to provide the annual report,  
            the authority shall not spend any funds received pursuant to a  
            resolution, as specified, until the authority has provided the  
            report, except for funds necessary to carry out its specified  
            obligations regarding housing for persons of low- and  
            moderate-income.



          15)Requires a CRIA to conduct a protest proceeding every 10  
            years.  If between 25% and 50% of residents and property  
            owners file protest, the authority must not initiate any new  
            projects, until an election of property owners and residents  
            is held.  If a majority of the electorate votes against the  
            authority, it must not take any further action to implement  
            the plan.

          16)Requires a CRIA to contract every five years for an  
            independent audit to determine compliance with affordable  
            housing maintenance and replacement requirements, which must  
            be conducted according to guidelines established by the  
            Controller.  A CRIA must provide a copy of the completed audit  
            to the Controller. 

          FISCAL EFFECT:  None


          COMMENTS:  


          1)Bill Summary.  This bill makes several changes to AB 2  
            (Alejo), Chapter 319, Statutes of 2015, which authorizes local  
            governments to create CRIAs to use tax increment revenue to  
            improve the infrastructure, assist businesses, and support  








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            affordable housing in disadvantaged communities.  The main  
            provisions of the bill: a) Allow a CRIA to use a combination  
            of both the US Census Bureau census track and census block  
            groups data to identify a project area; b) Allow a CRIA to  
            use, at their discretion, statewide, countywide, or citywide  
            levels of area median income to identify a project area; c)  
            Clarify the source of unemployment data required to identify a  
            CRIA project area; d) Clarify the determination of the crime  
            rate or a proposed CRIA project area; and, e) Give a CRIA the  
            same authority as an EIFD, to receive funds allocated to it,  
            pursuant to a resolution adopted by a city, county, or special  
            district, as specified. 


            This bill is sponsored by the League of California Cities.


          2)Author's Statement.  According to the author, "The passage of  
            AB 2 (Alejo) last year has provided local governments with the  
            critical tools they need to revitalize their communities,  
            combat blight, and reinvest in their citizens in a  
            post-realignment world.  AB 2492 will clarify existing issues  
            that have been found in the implementation of that landmark  
            measure."


          3)Background and Previous Legislation.  Multiple legislative  
            measures were introduced after the dissolution of  
            redevelopment agencies in an effort to provide local  
            governments options for sustainable community economic  
            development, including the following:


            SB 628 (Beall), Chapter 785, Statutes of 2014.  Provides local  
            governments with new tax increment financing tools to pay for  
            local economic development by forming an EIFD.  


            AB 2 (Alejo), Chapter 319, Statutes of 2015.  Authorizes local  








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            governments to create Community Revitalization and Investment  
            Authorities (authorities) to use tax increment revenue to  
            improve the infrastructure, assist businesses, and support  
            affordable housing in disadvantaged communities.  


            AB 2280 (Alejo) of 2014.  Would have established an authority  
            and given it the same rights, responsibilities and powers as  
            redevelopment agencies.  This bill was vetoed by the Governor.  



            AB 1080 (Alejo) of 2013.  Would have established an authority  
            and given it the same rights, responsibilities and powers as  
            redevelopment agencies.  This bill was held on suspense in the  
            Senate Appropriations Committee.  


            SB 1 (Steinberg) of 2013.  Would have allowed local  
            governments to establish a Sustainable Communities Investment  
            Authority to finance specified activities within a sustainable  
            communities investment area using tax increment financing.   
            This bill died on the Inactive File on the Senate Floor. 


            SB 1156 (Steinberg) of 2012).  Would have allowed local  
            governments to establish a Sustainable Communities Investment  
            Authority after July 1, 2012, to finance specified activities  
            within a sustainable communities investment area using tax  
            increment financing.  This bill was vetoed by the Governor.


          4)Arguments in Support.  Supporters argue that these minor  
            changes will help with implementation of the law and will  
            clean up provisions contained in AB 2 (Alejo).


          5)Arguments in Opposition.  Opponents argue that the consequence  
            of this legislation is that it will expand the number of  








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            communities and neighborhoods in which the government can  
            exercise its power to forcibly seize private property from  
            unwilling sellers.


          6)Double-Referral.  This bill was heard by the Housing and  
            Community Development Committee on April 27, 2016, where it  
            passed with a 5-2 vote.


          REGISTERED SUPPORT / OPPOSITION:




          Support


          League of California Cities [SPONSOR]


          California Association for Local Economic Development


          California Business Properties Association


          Cities of Hollister, Thousand Oaks


          Hollister Downtown Association




          Opposition


          California Alliance to Protect Private Property Rights








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          Howard Jarvis Taxpayers Association




          


          Analysis Prepared by:Debbie Michel / L. GOV. / (916) 319-3958